Description
This is a presentation describes about Shoppers stop's IT initiative and how it increased its competitiveness.
Shopper’s Stop
Enhancing Competitiveness through Strategic IT Initiative…
Presented By…
Group No. 9
Rutesh Acharya Ketaki Kolwalkar Oswald Mascarenhas Sachinkumar Patel Rajan Pawar Rajesh Rajgor
Roll No 01 Roll No 22 Roll No 30 Roll No 39 Roll No 42 Roll No 44
1
Global Retail Scenario
World’s largest private industry at $6.6 trillion Organized retail market holds 40% of the market 50 of the top Fortune 500 companies 25 of the top 200 Asian companies are retailers One of the largest employers Growth of the retail sector, overall growth of the economy. Performance of fashion retailers lifestyle products. Adverse impact on Indian economy = impact on consumer spend
2
Indian Retail Scenario
Currently valued at Rs 900,000 cr. Retail is India's largest industry Traditional markets are making way for departmental stores, hypermarkets, supermarkets and speciality stores Accounts for over 10 % of the India's GDP, around 8 % of Employment Retail in India could be worth US$ 175-200 billion by 2016 Challenges - taxation system, rapid price changes, constant threat of product obsolescence and low margins Tackled prudently - retail may offer employment opportunities to millions distributing benefits of economic boom and resulting in equitable growth Traditional Formats - Counter Stores Food(Kiraana Stores), Street Vendors
Organised Formats - Supermarkets (Subhiksha), Department Stores (Shopper’s Stop)
3
Shopper’s Stop
Shopper’s Stop is one of India’s prominent retailers and is a part of the K Raheja Corp Group which is among the prominent real estate developers and hoteliers in the country. ? Operates under the departmental store format and was one of the pioneers of the large format department stores in India. ? Merchandise includes a vast variety of lifestyle products and services with over 400,000 SKUs (Stock Keeping Units) complemented by their services offerings
? ? ? ?
Business has grown from 1 store in Mumbai from 1991 to 24 stores across country and 3 stores under the name “Home Stop” Shopper’s Stop is the only member of the Intercontinental Group of Departmental Stores, (IGDS) from India Growth strategy is based on
? increasing their reach and penetration across the country by opening new stores and through multiple retailing channels and formats ? furthering Shoppers’ Stop as an exponential retail brand through unique national and international products ? enhancing their merchandise width by adding new product categories and services, and strengthen their offerings by adding new brands and private labels to offer a better depth in each category
4
Product & Services
?
?
?
Product offerings are complemented by the cafe, food, entertainment, personal care and various beauty related services. Created strategic business units to manage its speciality businesses like Crossword, Mothercare, Brio, Desi Café Arcelia, Stop & Go and MAC. Promotions and events are an integral part of their service offering to their customer, creating unique shopping
5
Distribution Channels
? ?
Strong distribution and logistics network, with four Distribution Centers covering 303,382.20 square feet Distribution and logistic team handles all the merchandise movement and warehousing requirements, including inbound and outbound logistics, functioning on a 24x7 basis. Existing Distribution Centres of Shopper’s Stop, designed to scale up, will be able to meet their growth requirements as they expand no. of stores Distribution and logistics setup is networked and on line allowing them to deliver merchandise to store within 48 hours of receipt / generation of auto replenishment order The Distribution Center management is outsourced to third party service providers such as Toll (India) Logistics Private Limited Initiatives to improve the efficiencies of their supply chain, aim at meeting conflicting requirements of reducing their inventory whilst ensuring availability of products at all stores as per customer needs & reducing operational costs. For this, they have extensively used technology to ensure on-line movement of information and have integrated most of their partners in the supply chain including various departments, vendors, and some of the other service providers into the information system.
? ?
? ?
?
6
Trends & Market Watch
• ITC - e-Choupal and Choupal Sagar – rural hypermarkets. • HLL - Project Shakti initiative – leveraging women selfhelp groups • ‘e-tailing’ - Amazon.com to eBay to change buying behavior across the globe • Companies using their own web portal or tie-ups with horizontal players like Rediff.com and Indiatimes.com to offer products on the web.
Rural markets emerging as a huge opportunity for retailers :
Effect of Recession
• Indian Retail sector will feel the heat of the global financial crisis, as • Decline in disposable income • Sales of upper end goods as well as lifestyle items would get hampered • Utility items would not be hit hard
7
Market Watch
India is rated the fifth most attractive emerging retail market: a potential goldmine.
Organized retail market in India is expected to reach US$ 50 Billion mark by 2011.
Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015. Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%. Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010. Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011. Apparel, along with food and grocery, will lead the organized retailing in India. As per a report by KPMG the annual growth of department stores is estimated at 24%
8
The Process Flow for Retail
SKU creation
Input from Merchandiser/Supplier
Purchase Order (PO) Creation
Procurement Management
Receiving the Merchandise
Demand Scheduling
Transportation
Transfer to the Store
Inventory & Warehousing
Receiving in the Store
Sale in the Store
9
Key Differentiators
First Citizenship
• Shopper’s Stop loyalty program had 781,951 and 971,537members as on March 31, 2007 and December 31, 2007 respectively • One of the largest loyalty program in the country. • They offer their First Citizens rewards points on their purchases, special offers and discounts, and invitations to exclusive events and promotions.
Service Forte
• Providing customer a globally benchmarked shopping environment with best in class service. • Helped create a niche in the customers’ mind, and enhance brand equity. • Enables to create a differentiation in the mind of the customer versus their competitors where similar products and brands are available.
Systems and Processes
• Strong focus on systems and processes is a strong differentiator and is a critical success factor in their growth strategy • Manual of Authorities (MOA) governs decision making authority • Outlines the framework of financial and legal decision making authority at all levels in the Company, right up to the CCA & MD and the CCA, Executive Director & CEO.
Standard Operating Procedures (SOPs)
• Formulated extensive SOPs created into manuals to govern most activities including site selection, store planning, store operations, buying & merchandising, distribution & logistics etc
10
Key Competitors
• Pantaloon Retail (India) Limited, operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. • Pantaloons, Big Bazaar, Food Bazaar, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Pantaloons Station, aLL, Top 10, mBazaar and Star and Sitara, online portal, futurebazaar.com
Lifestyle
• Lifestyle International (P) Ltd is part of the Landmark Group, a Dubai – based retail chain. They offer apparel, babyshop, Home Centre, Shoe Mart and other lifestyle accesories.
Westside
• Trent Ltd. operates Westside, one of India's largest and fastest growing chains of retail stores. Menswear, Women’s wear, Kid’s wear, Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts.
The Globus
• Part of the Rajan Raheja group, complete fashion brand. • Fashion range comprises of apparel for men, women, kids and accessories – work wear, campus wear, club and lounge dressing and genres Western, Indian and mix-n-match
Local Compitor
• Stiff competition from existing retailers and potential entrants to the retail industry. Other departmental stores, speciality stores and other retailers in the organized and unorganized markets.
11
Customer Profile
Shoppers’ Stop caters to consumers who are demanding and discerning.
• 77% of total customers lie in the age group of 25 to 50 years. It has a large base of loyal customers and had 19.9 million customers by the year ending March 31, 2007 • Emotional connect that they have been able to create with their customers through their service offering and special promotions has helped them convert many of them into loyal customers (First Citizen members)
The Customer Objectives
• • • • • Customer always gets the merchandise of his / her size and choice Merchandise is always presentable and ready before customer entry Customer easily locates price tags and product information Price on the price tag and Point of Sale System always match Timely replenishment of fast moving merchandise
Changes in Indian Consumer
• Urbanization, the Indian consumer is emerging as more trend-conscious • Shift from price considerations to designs and quality as there is a greater focus on looking and feeling good (apparel as well as fitness • Indians have grown richer, a large working population being under the age group of 24-35, • The emergence of a larger middle and upper middle classes and the substantial increase in their disposable income
12
SWOT Analysis
Strengths
? ? ? ? ?
Opportunities
?
One of the pioneers in departmental format of retail stores Has a loyal customer base Has a low risk and sturdy business model Healthy financial position, low gearing Presence across retail segments, lifestyle, value and speciality retailing
Expected 30% CAGR in organized retail to result in better football & conversion rates
?
?
Entry into Tier 2 and Tier 3 cities
Collaboration with foreign players because of national brand
Threats
Weaknesses
? ? ?
?
Competition from standalone speciality stores Late foray into value retailing with 51% stake in promoter owned company High spend on store makeovers & interiors to ensure a pleasant shopping experience Rely extensively on their IT systems to provide the connectivity across business functions and processes. Any
Global recession crisis will affect the business Employee shortage and attrition due to rapid growth in retailing Impact of slowdown in consumer spend to be felt on department stores Opening up of the economy for free entry of foreign players
?
?
?
?
13
Business Operations
Events Promotions Advertisement Loyalty Program
Marketing
Mumbai DC Stores Consumer Demographics Design Development Range Planning Range Develop / Execute Purchase Order to Vendors
Inventory & Warehousing
Buying & Merchandising
Distribution & Logistics
Store Planning
Delhi DC
Stores
Human Resource
Vendors
Kolkata DC
Stores
Bangalore DC
Stores
Corporate
Finance Legal Information System
14
Value Chain
Purchase Order
Enterprise Headquarters
Shipment Order
Sales Data
Manufacturer
Warehouse (Storage)
Carrier
Supplier
Retailer
Customer
15
Linking Value Chain Analysis to Competitive Advantage
Primary Activity
Inbound logistics
Description
All those activities concerned with receiving and storing externally sourced materials
Operations
The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)
All those activities associated with getting finished goods and services to buyers Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) All those activities associated with maintaining product performance after the product has been sold
Outbound logistics Marketing and sales Service
Secondary Activity
Procurement Human Resource Management Technology Development
Description
This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Activities concerned with managing information processing and the development and protection of "knowledge" in a business Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management 16
Infrastructure
Present Scenario
Logistics and Supply Chain Management
• Strong distribution and logistics network and supply chain • Four Distribution Centers covering 303,382.20 square feet handling over 400,000 SKUs per year, and working 24x7. • Optimized in store availability of merchandise
Constraints Faced
• The efficiency is curtailed due to infrastructure constraints • The wider range of products make supply chain management even more complex • Efficient logistics services help organised retailers streamline their operational dynamics and thus more profitability
17
IT Initiatives
IT Backbone Data and network security systems managed by HCL COMNET 27 stores and 4 Distribution Centers (warehouses) linked up to the Services Office through high speed leased line
600 point of sales machines and over 1000 desktops or laptops connected to over 75 servers spread across different locations, through leased lines and Integrated Services Digital Network (ISDN)
18
Management Information Systems (MIS)
Strong MIS capabilities that make use of technological investments to generate valuable insight in improving operations, as well as in enhancing speed of response to what the customers want. Able to monitor performance on a day-to-day basis, across stores, departments and product categories and compare the same with other stores as well as across periods. This helps to take corrective action on a timely basis, and optimize stock. The process supplementing Business Intelligence capabilities through the deployment of Netezza, a next generation data warehousing appliance.
The first time that any company is using this technology in India. Also invested in Oracle Data Integrator (formerly Sunopsis) to map source systems to the Business Intelligence platform.
Currently using Business Objects to analyze data related to the buying trends of loyalty customers.
19
Current Systems
20
Challenges & Threats
? ?
Technology is important to cut costs, improve efficiency, providing value to customers and increasing the customer experience. ERP help in synchronising activities across various verticals such as Procurement of inventory, Distributions & Logistics, Supply Chain Management. Security from both external and internal threats are also important when the scale of the operations increases. Processes should be linked online, and utilize some of the leading technologies available to deliver overall control and efficiency. With changing customer aspirations and requirements, immediate monitoring of information on sales trends is critical. IT systems should help not only to monitor customer purchase patterns, but also allow organization to quickly respond to it by facilitating decision making and providing the tools to adjust operational strategy accordingly. Systems should facilitate to conduct business efficiently by helping to optimize resources including store space, inventory, manpower and overall capital deployed in business.
21
? ? ?
?
Key Challenges
Expansion & Diversification
• Suppose if a company is engaged in one particular domain of retailing it also needs to understand that it may have to cater to the entire retailing sector if the need arises. • Hence it must purchase ERP that can serve related retailing applications or if not be capable of modification for the said purpose in the future. • This will also stand out to be true in the case of organizations that aim at diversifying the business. A choice is to be made from ERP implementation models.
Meeting future needs
• Organizations have started to prefer an ERP system that meets the future needs. This can be a challenge to ERP as well because the visualization and expectations in companies may not always turn to be true. The quotation made to the ERP vendor has to be prepared only after keeping all these details in mind.
22
Integration of ERP
?
Assessing the chosen packages
? ? ? Team of Experts with specialized knowledge in their respective field will study on the basis of various parameters Test and certify if the package is apt for the range of application in their field Confirm level of coordination that ERP will help achieve in working with other departments
?
Preparing for the venture
? Will lay down the stipulations and criterias to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization Identify the gaps that has to be inorder to make ERP user friendly Restructuring changes in employee rolls, business process and technical details Requires lot of meticulous planning and deliberate action Decide and conclude the areas where restructing have to be carried on A choice is to be made from ERP implementation models
?
Gap Analysis
? ?
?
Business process reengineering
?
Designing the System
? ? ?
23
Integration of ERP (cont.)
?
In-house Guidance
? The employees in the company are trained to face crisis and make minor corrections
?
Checking
? Observation and testing of authenticity of the use ? The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation.
?
Replacement
? New mechanism of operation and administration takes over the older one
?
Preparing the employees to use ERP
? The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization.
?
Post Implementation
? Regular follow up and proper instruction flow thereafter and through the lifetime of ERP ? All efforts and steps taken to update and attain better benefits once the system is implemented
24
25
Post implementation Challenges
?
Full fledged and Partial ERP
? Not advisable to go for fullfledged ERP unless it is required by the organization ? Partial ERP does not denote partial implementation of ERP but it indicates the implementation of ERP to perform the required function and role exclusively ? Depends on the nature of business, scope of operations and similar details
?
Surplus commodities in production
? ERP can regulate and monitor all resources and production factors ? But each member/department have their own interest and plan of action with ERP ? Common objective of managing the surplus will not work out without proper coordination
?
Problem of sudden transformation
? Transformation is unlikely to be received by the organization positively .Even persons in the managerial cadre will not be receptive ? Demands tremendous work load at the beginning ? Bringing about an attitudinal change in the entire organization to match with ERP's Speed ? An ERP consultant will help to guide the company properly in these areas along with enterprise resource planning action
?
Equipping as a result of the transformation
? Attitudinal change + Certain changes in the organization structure is also desired ? Challenge in restructuring midway of ERP operations without affecting ERP's functioning
26
27
Thank you
28
doc_173286750.pptx
This is a presentation describes about Shoppers stop's IT initiative and how it increased its competitiveness.
Shopper’s Stop
Enhancing Competitiveness through Strategic IT Initiative…
Presented By…
Group No. 9
Rutesh Acharya Ketaki Kolwalkar Oswald Mascarenhas Sachinkumar Patel Rajan Pawar Rajesh Rajgor
Roll No 01 Roll No 22 Roll No 30 Roll No 39 Roll No 42 Roll No 44
1
Global Retail Scenario
World’s largest private industry at $6.6 trillion Organized retail market holds 40% of the market 50 of the top Fortune 500 companies 25 of the top 200 Asian companies are retailers One of the largest employers Growth of the retail sector, overall growth of the economy. Performance of fashion retailers lifestyle products. Adverse impact on Indian economy = impact on consumer spend
2
Indian Retail Scenario
Currently valued at Rs 900,000 cr. Retail is India's largest industry Traditional markets are making way for departmental stores, hypermarkets, supermarkets and speciality stores Accounts for over 10 % of the India's GDP, around 8 % of Employment Retail in India could be worth US$ 175-200 billion by 2016 Challenges - taxation system, rapid price changes, constant threat of product obsolescence and low margins Tackled prudently - retail may offer employment opportunities to millions distributing benefits of economic boom and resulting in equitable growth Traditional Formats - Counter Stores Food(Kiraana Stores), Street Vendors
Organised Formats - Supermarkets (Subhiksha), Department Stores (Shopper’s Stop)
3
Shopper’s Stop
Shopper’s Stop is one of India’s prominent retailers and is a part of the K Raheja Corp Group which is among the prominent real estate developers and hoteliers in the country. ? Operates under the departmental store format and was one of the pioneers of the large format department stores in India. ? Merchandise includes a vast variety of lifestyle products and services with over 400,000 SKUs (Stock Keeping Units) complemented by their services offerings
? ? ? ?
Business has grown from 1 store in Mumbai from 1991 to 24 stores across country and 3 stores under the name “Home Stop” Shopper’s Stop is the only member of the Intercontinental Group of Departmental Stores, (IGDS) from India Growth strategy is based on
? increasing their reach and penetration across the country by opening new stores and through multiple retailing channels and formats ? furthering Shoppers’ Stop as an exponential retail brand through unique national and international products ? enhancing their merchandise width by adding new product categories and services, and strengthen their offerings by adding new brands and private labels to offer a better depth in each category
4
Product & Services
?
?
?
Product offerings are complemented by the cafe, food, entertainment, personal care and various beauty related services. Created strategic business units to manage its speciality businesses like Crossword, Mothercare, Brio, Desi Café Arcelia, Stop & Go and MAC. Promotions and events are an integral part of their service offering to their customer, creating unique shopping
5
Distribution Channels
? ?
Strong distribution and logistics network, with four Distribution Centers covering 303,382.20 square feet Distribution and logistic team handles all the merchandise movement and warehousing requirements, including inbound and outbound logistics, functioning on a 24x7 basis. Existing Distribution Centres of Shopper’s Stop, designed to scale up, will be able to meet their growth requirements as they expand no. of stores Distribution and logistics setup is networked and on line allowing them to deliver merchandise to store within 48 hours of receipt / generation of auto replenishment order The Distribution Center management is outsourced to third party service providers such as Toll (India) Logistics Private Limited Initiatives to improve the efficiencies of their supply chain, aim at meeting conflicting requirements of reducing their inventory whilst ensuring availability of products at all stores as per customer needs & reducing operational costs. For this, they have extensively used technology to ensure on-line movement of information and have integrated most of their partners in the supply chain including various departments, vendors, and some of the other service providers into the information system.
? ?
? ?
?
6
Trends & Market Watch
• ITC - e-Choupal and Choupal Sagar – rural hypermarkets. • HLL - Project Shakti initiative – leveraging women selfhelp groups • ‘e-tailing’ - Amazon.com to eBay to change buying behavior across the globe • Companies using their own web portal or tie-ups with horizontal players like Rediff.com and Indiatimes.com to offer products on the web.
Rural markets emerging as a huge opportunity for retailers :
Effect of Recession
• Indian Retail sector will feel the heat of the global financial crisis, as • Decline in disposable income • Sales of upper end goods as well as lifestyle items would get hampered • Utility items would not be hit hard
7
Market Watch
India is rated the fifth most attractive emerging retail market: a potential goldmine.
Organized retail market in India is expected to reach US$ 50 Billion mark by 2011.
Number of shopping malls is expected to increase at a CAGR of more than 18.9% from 2007 to 2015. Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%. Organized retailing of mobile handset and accessories is expected to reach close to Rs. 5000 Crore by 2010. Driven by the expanding retail market, third party logistic market is forecasted to reach US$ 20 Billion by 2011. Apparel, along with food and grocery, will lead the organized retailing in India. As per a report by KPMG the annual growth of department stores is estimated at 24%
8
The Process Flow for Retail
SKU creation
Input from Merchandiser/Supplier
Purchase Order (PO) Creation
Procurement Management
Receiving the Merchandise
Demand Scheduling
Transportation
Transfer to the Store
Inventory & Warehousing
Receiving in the Store
Sale in the Store
9
Key Differentiators
First Citizenship
• Shopper’s Stop loyalty program had 781,951 and 971,537members as on March 31, 2007 and December 31, 2007 respectively • One of the largest loyalty program in the country. • They offer their First Citizens rewards points on their purchases, special offers and discounts, and invitations to exclusive events and promotions.
Service Forte
• Providing customer a globally benchmarked shopping environment with best in class service. • Helped create a niche in the customers’ mind, and enhance brand equity. • Enables to create a differentiation in the mind of the customer versus their competitors where similar products and brands are available.
Systems and Processes
• Strong focus on systems and processes is a strong differentiator and is a critical success factor in their growth strategy • Manual of Authorities (MOA) governs decision making authority • Outlines the framework of financial and legal decision making authority at all levels in the Company, right up to the CCA & MD and the CCA, Executive Director & CEO.
Standard Operating Procedures (SOPs)
• Formulated extensive SOPs created into manuals to govern most activities including site selection, store planning, store operations, buying & merchandising, distribution & logistics etc
10
Key Competitors
• Pantaloon Retail (India) Limited, operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. • Pantaloons, Big Bazaar, Food Bazaar, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Pantaloons Station, aLL, Top 10, mBazaar and Star and Sitara, online portal, futurebazaar.com
Lifestyle
• Lifestyle International (P) Ltd is part of the Landmark Group, a Dubai – based retail chain. They offer apparel, babyshop, Home Centre, Shoe Mart and other lifestyle accesories.
Westside
• Trent Ltd. operates Westside, one of India's largest and fastest growing chains of retail stores. Menswear, Women’s wear, Kid’s wear, Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts.
The Globus
• Part of the Rajan Raheja group, complete fashion brand. • Fashion range comprises of apparel for men, women, kids and accessories – work wear, campus wear, club and lounge dressing and genres Western, Indian and mix-n-match
Local Compitor
• Stiff competition from existing retailers and potential entrants to the retail industry. Other departmental stores, speciality stores and other retailers in the organized and unorganized markets.
11
Customer Profile
Shoppers’ Stop caters to consumers who are demanding and discerning.
• 77% of total customers lie in the age group of 25 to 50 years. It has a large base of loyal customers and had 19.9 million customers by the year ending March 31, 2007 • Emotional connect that they have been able to create with their customers through their service offering and special promotions has helped them convert many of them into loyal customers (First Citizen members)
The Customer Objectives
• • • • • Customer always gets the merchandise of his / her size and choice Merchandise is always presentable and ready before customer entry Customer easily locates price tags and product information Price on the price tag and Point of Sale System always match Timely replenishment of fast moving merchandise
Changes in Indian Consumer
• Urbanization, the Indian consumer is emerging as more trend-conscious • Shift from price considerations to designs and quality as there is a greater focus on looking and feeling good (apparel as well as fitness • Indians have grown richer, a large working population being under the age group of 24-35, • The emergence of a larger middle and upper middle classes and the substantial increase in their disposable income
12
SWOT Analysis
Strengths
? ? ? ? ?
Opportunities
?
One of the pioneers in departmental format of retail stores Has a loyal customer base Has a low risk and sturdy business model Healthy financial position, low gearing Presence across retail segments, lifestyle, value and speciality retailing
Expected 30% CAGR in organized retail to result in better football & conversion rates
?
?
Entry into Tier 2 and Tier 3 cities
Collaboration with foreign players because of national brand
Threats
Weaknesses
? ? ?
?
Competition from standalone speciality stores Late foray into value retailing with 51% stake in promoter owned company High spend on store makeovers & interiors to ensure a pleasant shopping experience Rely extensively on their IT systems to provide the connectivity across business functions and processes. Any
Global recession crisis will affect the business Employee shortage and attrition due to rapid growth in retailing Impact of slowdown in consumer spend to be felt on department stores Opening up of the economy for free entry of foreign players
?
?
?
?
13
Business Operations
Events Promotions Advertisement Loyalty Program
Marketing
Mumbai DC Stores Consumer Demographics Design Development Range Planning Range Develop / Execute Purchase Order to Vendors
Inventory & Warehousing
Buying & Merchandising
Distribution & Logistics
Store Planning
Delhi DC
Stores
Human Resource
Vendors
Kolkata DC
Stores
Bangalore DC
Stores
Corporate
Finance Legal Information System
14
Value Chain
Purchase Order
Enterprise Headquarters
Shipment Order
Sales Data
Manufacturer
Warehouse (Storage)
Carrier
Supplier
Retailer
Customer
15
Linking Value Chain Analysis to Competitive Advantage
Primary Activity
Inbound logistics
Description
All those activities concerned with receiving and storing externally sourced materials
Operations
The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products)
All those activities associated with getting finished goods and services to buyers Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) All those activities associated with maintaining product performance after the product has been sold
Outbound logistics Marketing and sales Service
Secondary Activity
Procurement Human Resource Management Technology Development
Description
This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Activities concerned with managing information processing and the development and protection of "knowledge" in a business Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management 16
Infrastructure
Present Scenario
Logistics and Supply Chain Management
• Strong distribution and logistics network and supply chain • Four Distribution Centers covering 303,382.20 square feet handling over 400,000 SKUs per year, and working 24x7. • Optimized in store availability of merchandise
Constraints Faced
• The efficiency is curtailed due to infrastructure constraints • The wider range of products make supply chain management even more complex • Efficient logistics services help organised retailers streamline their operational dynamics and thus more profitability
17
IT Initiatives
IT Backbone Data and network security systems managed by HCL COMNET 27 stores and 4 Distribution Centers (warehouses) linked up to the Services Office through high speed leased line
600 point of sales machines and over 1000 desktops or laptops connected to over 75 servers spread across different locations, through leased lines and Integrated Services Digital Network (ISDN)
18
Management Information Systems (MIS)
Strong MIS capabilities that make use of technological investments to generate valuable insight in improving operations, as well as in enhancing speed of response to what the customers want. Able to monitor performance on a day-to-day basis, across stores, departments and product categories and compare the same with other stores as well as across periods. This helps to take corrective action on a timely basis, and optimize stock. The process supplementing Business Intelligence capabilities through the deployment of Netezza, a next generation data warehousing appliance.
The first time that any company is using this technology in India. Also invested in Oracle Data Integrator (formerly Sunopsis) to map source systems to the Business Intelligence platform.
Currently using Business Objects to analyze data related to the buying trends of loyalty customers.
19
Current Systems
20
Challenges & Threats
? ?
Technology is important to cut costs, improve efficiency, providing value to customers and increasing the customer experience. ERP help in synchronising activities across various verticals such as Procurement of inventory, Distributions & Logistics, Supply Chain Management. Security from both external and internal threats are also important when the scale of the operations increases. Processes should be linked online, and utilize some of the leading technologies available to deliver overall control and efficiency. With changing customer aspirations and requirements, immediate monitoring of information on sales trends is critical. IT systems should help not only to monitor customer purchase patterns, but also allow organization to quickly respond to it by facilitating decision making and providing the tools to adjust operational strategy accordingly. Systems should facilitate to conduct business efficiently by helping to optimize resources including store space, inventory, manpower and overall capital deployed in business.
21
? ? ?
?
Key Challenges
Expansion & Diversification
• Suppose if a company is engaged in one particular domain of retailing it also needs to understand that it may have to cater to the entire retailing sector if the need arises. • Hence it must purchase ERP that can serve related retailing applications or if not be capable of modification for the said purpose in the future. • This will also stand out to be true in the case of organizations that aim at diversifying the business. A choice is to be made from ERP implementation models.
Meeting future needs
• Organizations have started to prefer an ERP system that meets the future needs. This can be a challenge to ERP as well because the visualization and expectations in companies may not always turn to be true. The quotation made to the ERP vendor has to be prepared only after keeping all these details in mind.
22
Integration of ERP
?
Assessing the chosen packages
? ? ? Team of Experts with specialized knowledge in their respective field will study on the basis of various parameters Test and certify if the package is apt for the range of application in their field Confirm level of coordination that ERP will help achieve in working with other departments
?
Preparing for the venture
? Will lay down the stipulations and criterias to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization Identify the gaps that has to be inorder to make ERP user friendly Restructuring changes in employee rolls, business process and technical details Requires lot of meticulous planning and deliberate action Decide and conclude the areas where restructing have to be carried on A choice is to be made from ERP implementation models
?
Gap Analysis
? ?
?
Business process reengineering
?
Designing the System
? ? ?
23
Integration of ERP (cont.)
?
In-house Guidance
? The employees in the company are trained to face crisis and make minor corrections
?
Checking
? Observation and testing of authenticity of the use ? The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation.
?
Replacement
? New mechanism of operation and administration takes over the older one
?
Preparing the employees to use ERP
? The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization.
?
Post Implementation
? Regular follow up and proper instruction flow thereafter and through the lifetime of ERP ? All efforts and steps taken to update and attain better benefits once the system is implemented
24
25
Post implementation Challenges
?
Full fledged and Partial ERP
? Not advisable to go for fullfledged ERP unless it is required by the organization ? Partial ERP does not denote partial implementation of ERP but it indicates the implementation of ERP to perform the required function and role exclusively ? Depends on the nature of business, scope of operations and similar details
?
Surplus commodities in production
? ERP can regulate and monitor all resources and production factors ? But each member/department have their own interest and plan of action with ERP ? Common objective of managing the surplus will not work out without proper coordination
?
Problem of sudden transformation
? Transformation is unlikely to be received by the organization positively .Even persons in the managerial cadre will not be receptive ? Demands tremendous work load at the beginning ? Bringing about an attitudinal change in the entire organization to match with ERP's Speed ? An ERP consultant will help to guide the company properly in these areas along with enterprise resource planning action
?
Equipping as a result of the transformation
? Attitudinal change + Certain changes in the organization structure is also desired ? Challenge in restructuring midway of ERP operations without affecting ERP's functioning
26
27
Thank you
28
doc_173286750.pptx